10 Questions

Virtual Reality: From development to investment, this cryptocurrency lawyer is all in

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Amy Madison Luo

Photo of Amy Madison Luo courtesy of Amy Madison Luo

The metaverse may be a virtual realm, but lawyer Amy Madison Luo is doing very real work there—and achieving very real success.

As a new partner at DIGITAL, a billionaire-backed venture firm, she invests in metaverse-focused blockchain companies, from applications to infrastructure. But she’s been working full time in this space since 2018, when she left BigLaw to follow her passion for a new kind of currency.

Luo’s career in crypto has been as exciting as the market itself. Among her many accomplishments: She helped develop and bring to market USD Coin, a leading branded stablecoin; she’s worked for the cryptocurrency exchange Coinbase; and she’s provided strategic and legal advice to leading nonfungible token companies, corporate presidents and even numerous celebrities.

Those celebrity connections came courtesy of the many contacts she made earlier in her career, when she worked for Paramount Pictures, Major League Baseball, Harmonix Music Systems and others.

Today the worlds of sports and entertainment are converging with cryptocurrency in innovative new ways via megadollar deals—meaning Luo, who splits her time between Los Angeles and New York City, is perfectly positioned to make a real impact in this brave new virtual world.

Q. The metaverse is such a hot topic these days—everyone’s jumping in, from business-world people like lawyers and investors to sports fans and gamers. Are you able to tell who’s serious about it and who’s just there for the flex?

A. You can definitely tell the difference between people that have put in time to understand Web3 [a new decentralized version of the internet] and the community, and the people that didn’t. Too often, you have a big brand come into the space and try to slap “NFT” on their product, and it’s very transparent. It doesn’t work. It’s so obvious to people in this space when you’re powerful in the traditional space and you just want the hype.

Q. I want to take you back to 2018. At the time, you were an associate in the Boston office of Ropes & Gray working in private equity. How did you get involved in cryptocurrency?

A. I actually discovered crypto in 2017. I learned about Ethereum first and then backed into Bitcoin. As a lawyer, I saw the transformative potential of smart contracts right away, across almost every industry we know of. To learn more, I started attending crypto conferences around the world. I remember I went to Mexico for an Ethereum developers conference. There were very, very few lawyers—if any—going to these conferences back then. It was like me and the Coin Center guys. Once people found out that I was a lawyer that also understood crypto, I’d walk out with a dozen job offers, so I decided to take one of them, and that’s how I ended up in the Caymans.

Q. What kind of work did you do there?

A. At the time, due to the regulatory uncertainty in the U.S., which still exists today, it was popular to set up token issuers offshore, particularly in the Cayman Islands—it’s a great neutral jurisdiction—so I went to the Caymans to work on structuring token projects. Basically, I was structuring the deals. What should the entity structure look like? Which entity should do what? What should the investment terms look like? But I wanted more of the bigger picture, so I moved to San Francisco, home of many of the great crypto companies we know and love today.

Q. You spent time with Atrium, a tech company that delivered legal services to startups, where your niche was working with blockchain-based entrepreneurs. What did that look like?

A. Businesses would come to us with these great, grand ideas, and I would help them figure out how to do it within the regulatory structure. That’s why this was so exciting—there’s no precedent for any of this or caselaw you can study—you’re putting on your thinking cap to figure out how this technology applies to existing laws and coming up with new business models and legal structures.

Q. Getting up to speed in this area, there are so many terms of art, it’s almost like another language. Did y’all come up with these new terms?

A. We did! We were coming up with new terms as we went along. Everything about this industry was like building a plane as it was taking off. It’s been fun and an honor being in the pilot’s seat for some of it.

Q. Speaking of new words, let’s talk stablecoin. You spent time as co-chair of the Stablecoin Working Group at the Blockchain Association and also as general counsel of USD Coin. How did you get involved in this area?

A. In 2019, I was senior counsel at Coinbase in San Francisco. I managed Coinbase’s legal, regulatory and policy issues for two U.S. dollar-pegged stablecoins: USD Coin and also Libra, which became the meta-backed Diem, now canceled. I inherited USDC (backed by Coinbase and Circle) when it was $500 million in market cap, and today it is over $50 billion. The things that make it so secure and trusted, I filled that infrastructure out. It was like building a startup. I started out by asking questions: How are the reserves governed? How are the private keys managed? What state banking laws do we need to follow? What does business continuity risk look like, and how do we mitigate the same, and how and when do we need to work with regulators and law enforcement all around the world to keep the network and its users safe? I had to get those answers and put a structure in place around each question. That’s what I was doing until I pivoted to investing.

Q. How did your work with sports and entertainment fit in?

A. Everything I’ve been talking about, that was my day job. Around the beginning of 2020, NFTs started taking off. It was bonkers and certainly came much earlier than I think most of us expected. At the very beginning of my career, I was in sports and entertainment, so I had brands and celebrities reaching out to me because I understood entertainment, I understood crypto, and I understood law. I could bridge the gap, connect the dots, and identify synergies, so I started advising these projects and companies. I also started posting information on my Twitter account, @_amymadison.

Q. Do you own any NFTs?

A. I do. My most recognizable one is probably a CryptoPunk. I use it sometimes as my avatar. CryptoPunks are one of the very first crypto projects, along with CryptoKitties. The first 10,000 [CryptoPunks] were minted for free; they were just released into the wild, and all you had to do was pay for gas. Fast-forward to today; the floor price of each is around $300,000. This means the cheapest punk sells for that amount, although the price may have dropped recently given the market downturn. The most expensive one was sold for double-digit millions. Even when prices for CryptoPunks were rapidly rising, especially after Visa purchased one, I didn’t want to sell mine because of my emotional connection. I am emotionally attached to this JPEG. How about virtual clothes or sneakers?

Not yet, but we’re just at the beginning of this new wave. Skins and cosmetic add-ons are already a double-digit billion-dollar industry, and those are stuck in-game. Imagine a world where we can bring those outfits with us, across games, universes and platforms. I’m currently advising a fashion platform and helping them to do just that. I personally love dressing up IRL—in real life—and can’t wait to continue to express my personality and style in the metaverse via my avatar.

Q. Was it hard to leave the industry behind to move into full-time investing?

A. No. I’ve always wanted to expand beyond law, and through my advising, I had already ventured deep into business and strategy, so I was following my heart. Law is a fantastic foundation to build an investing and business career, especially in crypto, where legal considerations are interwoven into every product decision and can often make or break a company. I love, love, love being an investor. My whole job is going out and meeting new people and learning about what they’re doing and figuring out how I can add value. Capital is so cheap, and every deal worth pursuing is oversubscribed. But I can offer something that many people can’t: my legal expertise and ability to connect traditional tech companies to Hollywood and beyond.

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